I have a client that disposed of some of his tangible S Corp. Assets and will be eligible for installment sales. I would like some clarification how the Form 6252 flows to the 1120S and subsequently to the K1. Once I complete the Form 6252 and find the Gross profit percentage this portion of the profit from the payments should be reported where exactly on the 1120S?
For sale of business use property it goes from Form 6252, to Form 4797, to Form 1120S, on the K-1 it depends on exactly what the assets are, but likely they will will end up in box 9 - Net section 1231 gain. Carefully consider the installment sale for depreciable property, all of the depreciation must be recaptured in the year of the sale, even if no payments have been received.
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